According to the Health Insurance Fund, in May of this year about 90,000 people in Estonia — 7.2 percent of the population — were without health insurance coverage. In comparison with European Union countries, we are second from the bottom in terms of insured persons; only Romania's situation is somewhat worse.

Among OECD countries, only Mexico, Costa Rica and the United States rank below us. In the United States, 7.7 percent of the population lacked health insurance in 2023. These countries are usually cited as examples of poorly functioning healthcare systems for precisely this reason. In reality, we see that Estonia is equal to the United States in terms of health‑insurance coverage.

Estonia's health‑insurance system deepens inequality

Under the Health Insurance Act, Estonia's health insurance is compulsory. In practice, however, this does not mean that all Estonian residents have health insurance. For children and pensioners, coverage arises automatically, but for the working‑age population it depends on participation in the labor market and payment of social tax, or belonging to a group that guarantees insurance coverage.

As a result, uninsured people are of working age: among 20–59‑year‑olds, 14 percent of men and 10 percent of women lack health insurance. At the same time, men's health is worse than women's.

Regional inequality is also striking. The highest number of uninsured working‑age people is in Ida‑Virumaa, where in the same age group 21 percent of men and 17 percent of women lack health insurance. Life expectancy in Ida‑Virumaa is two years lower than the Estonian average.

In Estonia, to our knowledge, the health status of uninsured and insured working‑age people has not been compared. But if we look at the leading cause of avoidable deaths — cardiovascular diseases and hypertension — a large part of effective prevention and treatment should occur before retirement age. These services are not reimbursed for uninsured people. Therefore, it is not surprising that a recent National Audit Office report shows that nearly one‑third of hypertension patients discontinue treatment within half a year of diagnosis, and medication use is not consistent.

Since access to preventive and timely healthcare depends on having health insurance, it is no exaggeration to say that by leaving a significant share of the population without stable coverage, we lose valuable years of healthy life.

Keeping people uninsured does not save taxpayers' money

Lack of health insurance does not mean that a person is left completely without help. Emergency care and a few other services, such as addiction treatment, are available to uninsured people. Most healthcare services and medicines, however, are available to uninsured people only if they can pay for them themselves.

Restricting access for uninsured people may not save taxpayers money. Often it means that treatment is delayed and ultimately becomes more expensive.

The National Audit Office's 2018 emergency‑medicine audit showed that uninsured people often arrive at the ER only when the health problem has already worsened. The analysis found that in 2017 the average cost of ER outpatient treatment for uninsured people was nearly 27 percent higher, and the cost of inpatient treatment for uninsured patients admitted from the ER was nearly 33 percent higher than for insured patients.

The reason is simple: when primary care, necessary tests and medicines are not accessible, people seek help only when the health issue becomes unavoidable. This is confirmed by the audit. Among people who visited the ER with the same health problem, 20 percent of insured individuals had visited a family doctor in the previous year, but only 3.5 percent of uninsured individuals had done so.

This means that under the current system, taxpayers ultimately pay for more expensive treatment, while significantly more affordable preventive services are not provided at the right time. And if an uninsured person is diagnosed with a serious health problem, they can apply for incapacity for work at the Unemployment Insurance Fund, which then grants health‑insurance coverage.

At first glance, this may seem like a practical solution. In reality, it means that the system waits until a person's health deteriorates and begins to cover costs only when they are already much higher.

The same happens when a previously uninsured person reaches retirement age and becomes insured. To our knowledge, this has not been studied in Estonia, but a U.S. study (McWilliams et al., 2007) showed that previously uninsured people used more healthcare services after reaching retirement age and receiving Medicare coverage than their previously insured peers with the same health problems.

The share of uninsured people may grow further

If we continue on the same course, the share of uninsured residents can be expected to grow rather than shrink. Estonia's health‑insurance model assumes stable employment and regular income. The labor market is moving in the opposite direction. More unstable employment relationships, project‑based work, platform work, part‑time work and forms of entrepreneurship are emerging, where income may be intermittent or insufficient to generate health‑insurance coverage.

The use of artificial intelligence also has an impact, changing the nature of work and reducing demand for certain types of tasks. This particularly affects so‑called white‑collar work, where a large share of activities — such as data analysis, programming, accounting, preparatory legal work, communication and administrative tasks — can be partially replaced or reshaped with AI. In these fields, entering the labor market may become more difficult for young people with higher education, and finding a stable first job may take longer. As a result, health‑insurance coverage will decrease even further.

Voluntary health insurance is not a solution

At the beginning of this year, the conditions for voluntary health insurance offered by the Health Insurance Fund were changed so that it could also be purchased by people who would otherwise remain without coverage. By the end of May, however, fewer than a thousand people had bought such insurance — about 0.1 percent of those insured. Compared with the end of last year, about 300 people have been added. These figures show quite clearly that voluntary insurance is not an effective way to improve health‑insurance coverage.

There are two reasons. First, the insurance premium is high. It is calculated based on last year's average wage, and starting in July the monthly payment is 272 euros. For a person without stable income or with low and irregular income, this is economically inaccessible. For comparison: for a person insured by the state (for example, someone registered as unemployed), the state pays 115 euros per month into the health‑insurance system — more than twice less.

The second and even more important reason is voluntariness itself. International experience clearly confirms that a system based on voluntariness cannot achieve health‑insurance coverage for the entire population.

Residence‑based health insurance as the only possible solution

Why is Estonia among the last in the European Union in terms of health‑insurance coverage? In most countries, health insurance is mandatory for all permanent residents. In Estonia, this idea has been discussed before, but set aside mainly for two reasons: fear that people's motivation to pay taxes will decrease, or that the system will incur additional costs without a funding source. The experience of other countries shows that these risks are manageable.

In Lithuania, health insurance is mandatory for all residents. If a working‑age person is not in stable employment and does not belong to a state‑insured group, they must pay a health‑insurance contribution calculated on the basis of the minimum wage, which is about 80 euros per month.

The same principle applies in the Czech Republic, where the contribution based on the minimum wage is about 125 euros per month. In the Netherlands, all residents are required to have basic insurance, and the minimum insurance premium is 173 euros per month; if a person does not comply, state supervision, fines and eventually automatic insurance are applied (UHC Watch).

In all three countries, the underlying principle is that health insurance is mandatory for all permanent residents. If a person is required to pay and does not do so, a debt arises and they may be fined. At the same time, the obligation to pay is treated separately from the person's insurance coverage, which remains in place.

Health Insurance Fund revenues would grow

In Estonia, there are currently about 90,000 uninsured people, and there is no clear systematic overview of why they are uninsured: whether they lack income, whether they would be entitled to coverage through another basis, or whether they should actually be paying contributions themselves.

Residence‑based and mandatory health insurance for all would give the state a basis to take a more active role in identifying these people, assessing their ability to pay and organizing their insurance coverage. It is hard to see why this should reduce tax compliance. Rather the opposite, because the current situation allows a person to increase their income while avoiding paying the health‑insurance contribution.

From the perspective of Health Insurance Fund revenues, expanding coverage should not be viewed as an unfunded additional cost. If even half of the 90,000 uninsured people — about 45,000 — began paying a health‑insurance contribution calculated on the basis of the minimum social‑tax payment (115 euros per month based on last year's minimum wage), this would mean about 62 million euros in additional annual revenue for the Health Insurance Fund. It is unlikely that the additional cost of insuring these people would exceed that amount, especially considering that part of their care is already paid through emergency assistance.

The Riigikogu elections are approaching, and health‑insurance coverage should be one of the key issues in party healthcare programs. Not only because nearly 90,000 uninsured people place Estonia in an uncomfortable position in international comparison. Above all, because the current Health Insurance Act contains gaps that allow working‑age people to fall out of the system. For the Health Insurance Fund, this means lower revenue and larger costs postponed into the future. More important than money is that inadequate health‑insurance coverage means lost human capital.

Triin Habicht is a senior health economist at the World Health Organization (WHO) Barcelona Office for Health Systems Financing, Andres Võrk is a health economist (University of Tartu School of Economics), and Kaija Kasekamp is a consultant at the WHO Barcelona Office for Health Systems Financing.